JULY- DECEMBER 2 00 2 VOL VI NO 2

Doing Good and Being Good: Aspects of Development NGO Governance in the Philippines FERNANDO T ALDABA

Giving and Volunteering among Filipinos RAMON L FERNAN Ill

Struggling for Sustainability ISAGANI R SERRANO

Non-Governmental Organizations and Advocacy: Lessons and Prescriptions for Policy Change EDNA E A CO

Afterword: NGOs Face Bigger Challenges FILOMENO S STA ANA Ill

Book Reviews

Greg S. Castilla: In His Own Words. The Educational Thoughts of Carlos Bulosan PAZ VERDADES M SANTOS

SUSAN EVANGELISTA

P-JJBLIC 1--'0LICY

..................................................................

EDITORIAL BOARD Francisco Nemenzo Jr, Chairman; Emil Q Javier; Jose V Abueva;

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PUBLIC POLICY

CONTENTS

Editor's Note

Essays

Doing Good and Being Good: Aspects of Development NGO Governance in the Philippines

Fernando T Aldaba 1

Giving and Volunteering Among Filipinos Ramon L Fernan III

27

Struggling for Sustainability Isagani R Serrano

47

Non-Governmental Organizations and Advocacy: Lessons and Prescriptions for Policy Change

Edna EA Co 75

Afterword: NGOs Face Bigger Challenges Filomeno S Sta Ana III

93

BOOK REVIEWS

Greg S Castilla In His Own Words. The Educational Thoughts of Carlos Bulosan

Paz Verdades M Santos/Susan Evangelista 109

EDITOR'S NOTE

Non-government organizations or NGOs are back in the limelight. They

played a major role in EDSA II; they were instrumental in shaping public opinion

and in mobilizing various forces which constituted the core of the protesters. The

same is true for EDSA III, which some would rather call a reaction. The NGOs

that supported Joseph Estrada created an upheaval that nearly toppled the newly

formed Gloria Macapagal-Arroyo presidency. The pro-Estrada NGOs and ur-

ban poor organizations also produced the warm bodies of the masa in the failed

Malacafiang attack.

N GOs, regardless of their loyalty or their independence and regardless of their

rivalry, have shown that they are a powerful force that can shake the Philippine

political landscape. EDSA II and EDSA III-and for that matter, EDSA I, have

demonstrated the role of NGOs in making or unmaking governments.

On the other hand, controversies and scandals involving NGOs have emerged

before and after EDSAll. The more embarrassing controversies have not only ex-

posed the bad NGOs but have tarnished the image of the whole NGO community

and can possibly diminish the credibility and legitimacy of NGOs.

It is against this background that interest in NGOs is growing. The University

of the Philippines is one of a few academic institutions that have undertaken pio-

neering efforts in studying NGOs. In Diliman, the College of Social Sciences and

Philosophy, the National College of Public Administration and Governance, and

the College of Social Work and Development have courses and/or programs on

NGOs and the non-profit sector. There are similar programs in the other Univer-sity of the Philippines campuses.

Research centers-the Third World Studies Center and the Center for Inte-

grative and Development Studies, among others-have consistently promoted stud-

ies and discourses about the NGOs, the broader civil society and the movements for social change.

Other prestigious educational institutions have also embarked on strengthen-

ing their programs relating to NGOs and the social movement. Ateneo de Manila

University and other Jesuit institutions have built academic programs as well as

research offices and support groups that cater to NGOs and people's organiza-

tions. De La Salle University has begun to undertake NGO advocacy through its

Institute of Governance. The Asian Institute of Management and the University of

Asia and the Pacific, aside from offering courses suited to the non-profit sector, are

involved in policy advocacy in collaboration with other civil society groups.

In the same vein, we see a steady growth in the literature about NGOs, civil

society and their interaction with the state. We can expect more scholarly publica-

tions on this subject to come out soon. The Ateneo de Manila Press has led the

way in publications. Soon to be off the press are books authored by Jose J. Magadi a

on "state-society dynamics," in which NGOs and other civil society groups figure

prominently, and by Dorothea Hilhorst, which focuses on NGO dynamics in the

Cordillera region.

It is high time Public Policy addressed the NGO phenomenon. This issue of Public Policy aims to contribute to the enrichment of the discourse on NGOs, civil society and development. The contributors-Fernando T. Aldaba, Edna E.A. Co, Ramon L. Fernan III and Isagani R. Serrano-are all scholars in their own right, as academics or as "public intellectuals." Equally important, they are NGO practitio-

ners, boasting of solid track records which span a generation of active involvement

in social and political movements. What they write on the issue of NGOs thus

carries a lot of weight.

The contributions to this volume address what the authors consider to be the

critical issues and challenges that face NGOs and the larger civil society. An afterword from the editor completes the collection of essays on NGOs. Hopefully, these es-

says will capture the interest, if not provoke the minds, of the readers of Public

Policy, who for better or for worse, are affected by the increasing intervention of NGOs in public life.

JULY- DECEMBER 2002

!WBLIC YOLICY VOLUME 6 NUMBER 2

Doing Good and Being Good: Aspects of

Development NGO Governance in the

Philippines1

FERNANDO T ALDABA

Cood Covernance as a Key Development Issue

Good governance is a strategic factor for sustainable human development. For

the past two decades, mainstream economists have been pushing for market re-

forms like trade liberalization and privatization to foster greater competition and to

enhance growth in many developing economies. While economic growth and de-

velopment have accelerated in certain areas of the global economy, i.e. East Asia,

sustained human development remains an elusive dream for many countries in the

third world. While market reforms are indeed important, there are other key prob-

lems confronting the developing nations- corruption, ineffective bureaucracy, rent

seeking, patronage politics, authoritarianism, etc. All these issues redound to weak

Aldaba

and ineffective governance which continue to plague the said countries. Today,

aside from market reforms, various sectors of society including multi-lateral and

bilateral aid agencies call for governance and institutional reforms so that sustain-

. . . governance has always been a key

development ISSUe

able human development can be achieved .

In many ways, governance has always been a key

development issue. Governance is broadly defined as

"an exercise of political, economic and administrative

authority to manage a nation's affairs"(UNDP 1997).

Furthermore, governance transcends the state and in-

cludes both the private sector and civil society. How-

ever, most recent studies on governance focus on the

public and corporate sectors, examining both institutions from the lens of trans-

parency, accountability, participation, efficiency, equity, sustainability, legitimacy

and integrity- all important characteristics of good governance (World Bank

2000 and UNDP 1997).

In the case of the Philippines, current literature on public sector governance

has focused on topics that include decentralization, corruption, fiscal manage-

ment and civil society participation. There are also emerging studies on corpo-

rate governance highlighting pressing concerns that include ownership and mar-

ket concentration, autocratic decision-making processes and transparency and

accountability in private enterprises (Saldana 2000 and World Bank 2000). How-

ever, published material on the governance of civil society organizations in the

Philippines is relatively scant except for those related to sustainability and strate-

gic management (Quizon et al. 1989, Alegre 1996, Aldaba et al. 2000). At the

international level, there is now a growing literature on governance and account-

ability of non-government organizations (NGOs). A more recent article ana-

lyzed the publicized incidents of alleged wrongdoing of NGOs all over the world

(Gibelman and Gelman 2001).

The civil society sector in the Philippines consists of organizations that lie

between the state and the market. They are neither government institutions nor

businesses and private enterprises. Legally speaking, these groups compose what

the Securities and Exchange Commission classifies as the non-stock, non-profit

2 PUBLIC POLICY

Doing Good and Being Good: Aspects of Development NCO Governance in the Philippines

2 organizations in the Philippines . NGOs are a sub-category of civil society

organizations and include civic organizations, charitable institutions and foun-

dations, faith-based organizations and grassroots and community associations.

Among these NGOs are "development NGOs" which are estimated to num-

ber around 3,000-5,000, most of which are members of the Caucus of Develop-

ment NGO Networks (CODE-NGO), the largest coalition of development

NGOs in the country today. Development NGOs are typically middle-class

based organizations providing various services (e.g. training, community orga-

nization, health and livelihood, etc.) directly to grassroots communities and

other marginalized groups (Aldaba 1993). Academics studying development

NGOs refer to these institutions as social development agencies or private vol-

untary development organizations3

•

Characteristics of coed covernance: A Development NCO Perspective

Development NGO governance for the purpose of this paper is defined as

the processes and structures by which these organizations try to fulfill their vision

and mission towards the promotion of social and human development. These

would encompass management and personnel practices, financial management

and reporting, networking and partnership arrangements and project and pro-

gram implementation. Development NGO praxis 4

characterizes good governance

by the following:

• Social Development and Public Service as Key Mission: Development N GOs are guided by a vision and mission towards societal good, particularly social

and human development.

• Transparency and Accountability: Constituents and stakeholders of the NGOs must be well defined and there should be clear lines of accountability

in terms of structure; there is also full disclosure of sources and uses of

funds; open information on the NGO's major programs, activities and

projects.

• Participatory Management and Decision Making Processes: Staff members of development NGOs actively participate in the management of the

VOLUME VI NUMBER 2 (July- December 2002) 3

Aldaba

organization as a clear manifestation of organizational democracy and

empowerment.

• Effective and Efficient Implementation of Programs and Projects: The development NGO is able to optimize use of limited resources but at the

same time is able to successfully achieve goals and objectives in an effective

manner.

• Participatory and Consultative Processes in Program and Project Implementation: People empowerment by development NGOs must mean they are serious

in making communities and target groups participate in their programs and

projects from design and implementation to final evaluation:

- Sound Financial Policies and Financial Sustainability: Like other organizations, development NGOs must have sound financial and

accounting practices and at the same time be able to sustain themselves

to continue their mission.

- Sound Staff Development Policies: Development NGOs must be able to adequately address training and human resource needs of their personnel.

- Effective Networking and Partnership: Having diverse publics, development NGOs must be able to successfully relate to government, the corporate

sector, other N GOs and key stakeholders in the fulfillment of their work

and mission.

For sure, not all development NGOs will be able to meet the above criteria.

However, these are the key aspects of governance that eventually will indicate whether an N GO is serious in promoting good governance in its own turf.

Aspects of Philippine Development NCO covernance: Some Empirical Evidence

This section tries to examine recent survey data that may empirically support

aspects of good governance by development NGOs in the Philippines. The CODE-

N GO through one of its members, the Association of Foundations (AF), embarked

on a Mega Databank Project which aimed to develop a base of information to

4 PUBLIC POLICY

Doing Good and Being Good: Aspects of Development NGO Governance in the Philippines

strengthen collaboration among member NGOs and to provide donors informa-

tion on the nature and scope of their operations (Tuano 2001). This CODE-NGO-

AF Survey is the primary source of data for this study. A supplementary source is a

smaller survey by PHILSSA, another CODE-NGO organization. This was con-

ducted to generate and update information on the different aspects of member

organizations' lives which shall serve as bases for developing concrete plans and

programs to fulfill their corresponding mandates5

. There were 762 NGO respon-

dents in the CODE-NGO-AF survey and 33 in the PHILSSA survey.

A caveat in this study though is that the surveys themselves were not done to

elicit responses to cover such practices. Thus, the following consist of still limited

observations and analyses in relation to the entire development NGO community.

sectors and Areas of work: Public Interest and social Development

Good governance starts with the appropriate mission for the NGO commu-

nity. The development NGOs in the country are involved in activities and pro-

grams that promote social and human development. These projects and programs

also respond to the needs of marginalized groups and sectors. The following data

from the CODE-NGO-AF survey confirms this.

The Nature of work

The nature of work of NGO respondents primarily involves education, train-

ing and human resource development, 77.1 percent, and community development,

56.4 percent. Other activities the respondents are involved in include sustainable

development and the environment, 45.7 percent, health and nutrition, 43.5 per-

cent, enterprise and livelihood development, 43.4 percent, gender and develop-

ment, 40.2 percent, social services, 35.4 percent, microcredit and microfinance,

31.3 percent, and cooperative development, 30.9 percent. For a more complete

picture, see the Table 1.

VOLUME VI NUMBER 2 Ouly- December 2002) 5

Aldaba

TABLE 1. Frequency Count of Respondents, By Scope and Nature of Work

Scope and Nature of Work

Agrarian Reform and Rural Development

Arts and Culture

Cooperative Development

Gender and Development

Health and Nutrition

Education, Training and Human Resource Development

Community Development

Enterprise Development and Livelihood

Microcredit/ Microfinance

Peace and Development

Labor Organizing

Science and Technology

Social Services

Legal Services

Student and Volunteer Formation

Sustainable Development & Environment

Urban Poor and Social Housing

Percent does not add up to 100 because of multiple responses

Source: CODE-NGO-AF Swvey 2001

Programs and Activities

Count

140

94

236

307

332

588

434

331

240

148

23

62

270

98

144

349

94

Percent

18.3

12.3

30.9

40.2

43.5

77.1

53.9

43.4

31.3

19.4

3.0

8.1

35.4

12.8

18.9

45.7

12.3

With regard to programs and activities 6

, the majority of the respondents report

that their strengths are in education and training, 81.5 percent; advocacy, 62.4 per-

cent; networking, 56.0 percent; community organizing, 55.2 percent; and capability

and institution building, 53.7 percent. Other core competencies include livelihood,

44.2 percent; project management, 37.6 percent; research, publication and docu-

mentation, 36.0 percent; resource mobilization, 29.2 percent; medical and health

services, 26.6 percent; counseling, 26.1 percent; sustainable integrated area devel-

6 PUBLIC POLICY

Doing Good and Being Good: Aspects of Development NGO Governance in the Philippines

opment, 25.3 percent; consulting services, 25.7 percent; and lending, financing and

grants, 23.1 percent.

TABLE 2. Frequency Count of Respondents, By Competency/ Specific Activities

Competence/ Activities

Advocacy

Community Organizing

Consulting Services

Education and Training

Capacity and Institution Building

Medical, Health and Dental

Networking

Project Management

Research, Publications and Policy

Resource Mobilization

Livelihood

Lending

Counseling

Sectoral Organizing

Sustainable Integrated Area Development.

Technology Transfer

Percent does not add up to 100 because of multiple responses

Source: CODE-NGO-AF Survey, 2001

Marginalized Sectors Reached

Count

476

421

196

622

410

203

427

287

275

220

337

176

199

133

193

143

Percent

62.4

55.2

25.7

81.5

53.7

26.6

56.0

37.6

36.0

28.8

44.2

23.7

26.1

17.4

25.3

18.7

The following data establish a fact that many development NGOs deal with

the marginalized sectors of society. According to the CODE-NGO-AF Survey, the

majority of respondents are involved with the women's sector, 56.4 percent, and

youth and children, 56.9 percent. Other sectors that are being served by the respon-

VOLUME VI NUMBER 2 Guly- December 2002) 7

Aldaba

dents are peasants, 34.5 percent; urban poor, 32.9 percent; indigenous communi-

ties, 29.9 percent; and fisherfolk, 29.1 percent.

TABLE 3. Frequency Count of Respondents, By Sectors Reached

Marginalized Sector

Elderly

Fisherfolk

Indigenous Peoples

Labor

Peasants

Persons with Disability

Urban Poor

Veterans

Victims of Calamities and Disasters

Women

Youth and Children

Percent does not add up to 100 because of multiple responses

Source: CODE-NGO-AF Swvey, 2001

Transparency and Accountability

Count

85

222

228

101

263

55

251

25

129

430

434

Percent

11.1

29.1

29.9

13.2

34.5

7.2

32.9

3.3

16.9

53.4

56.9

Accreditation with the Securities and Exchange commission fSECJ

Development NGOs must have a legal personality in order to be able to trans-

act "business" in a legitimate. way. Contracts are valid only if the parties involved

are legitimate organizations. NGOs cannot open bank accounts without being reg-

istered with an appropriate government agenc/ . Most of the respondents of the

CODE-NGO-AF Survey, i.e. nine in ten, are registered with the Securities and

Exchange Commission (SEC), the government agency involved with the registra-

tion of private entities.

8 PUBLIC POLICY

Doing Good and Being Good: Aspects of Development NGO Governance in the Philippines

Financial Practices

Good governance requires that financial reports be regularly audited, both in-

ternally and externally. Two-thirds of respondents reported that they are regularly

audited. What is noteworthy is that this number is increasing (67.1 percent in

1996,69.7 percent in 1997 and 73.8 percent in 1998). In terms of financial policies

and practices, more than four of five respondents have written financial policies,

and almost nine of ten have books of accounts, have bank accounts that require at

least two check signatories and have yearly planning sessions.

TABLE 4. Frequency Count of Respondents, By Presence of Financial Policies

Respondents with

Written Financial Policies

Books of Accounts

Two Signatories

Yearly Planning

Bank Accounts

Total respondents: 762

Source: CODE-NGO-AF Survey. 2001

Frequency

630

681

666

659

689

Percent

82.6

89.3

87.3

85.6

90.3

While implementation is also important with regard to financial policies, the

data suggest that an increasing number of NGOs have now improved their finan-

cial and accounting systems. H;owever, a significant number (12-18%) still needs

to improve financial accountability.

Annual Reports to the securities and Exchange commission

While a high percentage of N GOs are registered with the SEC, less than half

fulfill the requirements for annual reporting in the years 1997 and 1998. These

reports are indicative of how the NGOs operate, particularly in terms of financial

management. However, many NGOs complain about their difficulty in meeting

VOLUME VI NUMBER 2 Guly - December 2002) 9

Aldaba

the reporting requirements as these would entail additional expenditures from their

meager resources. The following table summarizes the number and percentage of

those reporting to the SEC.

TABLE 5: NGOs Reporting and not Reporting to the SEC

Year

1997

1998

Total respondents: 762

Reported

353 (46.3%)

366 (48.0%)

Source: CODE-NGO-AF SuNey, 2001

Not Reported N/A, Others

298 (39.1%) 111 (14.6%)

293 (38.5%) 103 (13.5%)

Total

762 (100%)

762 (100%)

In terms of location, there is a higher percentage of NGOs reporting in the

National Capital Region8

, probably because the main office of the SEC is in Ma-

nila. Other characteristics of those which tend to report are a) 'old' and 'very old'

NGOs, b)NGOs with large and medium expenditure sizes, c) NGOs with big

staff sizes.

Self-Regulation by the Development NGO community

Interesting developments in the community include the various initiatives to-

ward self-regulation. This is important as the development NGOs realize the im-

portance of good governance in their work. Two major facets of this self-regulation

have emerged in the last decade.

The covenant on Philippine Development

This document containing a vision of genuine development, key development

principles to live by and a code of ethics was ratified by the membership of CODE-

NGO in December 1991. Most of the development principles are based on the

United Nations Right to Development. Until the present, this document is the

10 PUBLIC POLICY

Doing Good and Being Good: Aspects of Development NCO Governance in the Philippines

main guide of most of the members of CODE-NGO and was amended in the last

Congress held in November 2001. The CODE-N GO, as a response to this docu-

ment, has activated a committee called Committee on Internal Reform Initiatives

( CIRI) to give flesh to the code of ethics and to scrutinize issues related to the said

part of the document. As of this writing, only two NGOs have been sanctioned by

the network because of violations of its Code ofEthict

The Philippine council for NCO certification

When the details of the proposed Comprehensive Tax Reform Program ( CTRP)

were released to the business and NGO community in the mid-1990's, leaders of

both sectors realized the detrimental effect of eliminating tax incentives for corpo-

rate donors and receiving NGOs. During one of the hearings on the CTRP, it was

suggested that there be a joint public-N GO sector partnership to establish a regula-

tory body for NGOs that receive donor funding. In 1995, CODE-NGO together

with the Association of Foundations, the League of Corporate Foundations, the

Philippine Business for Social Progress, the Bishop Businessmen Conference and

the National Council for Social Development founded the Philippine Council for

NGO Certification (PCNC).

PCNC was registered with the SEC as a non-stock, non-profit organization on

January 29,1997. In early 1998, after the CTRP was signed into law a year before,

an agreement was signed between the PCNC and the Department of Finance nam-

ing the PCNC as the sole body to establish and operationalize a system of accredi-

tation to determine the qualification of domestic corporations and NGOs for ac-

creditation as donee institutions. The word "sole" was deleted in the Implement-

ing Rules and Regulations though no other agency was given authority during that

time. A Bureau oflnternal Revenue10

representative was also made to sit in the

PCNC board. These and other PCNC responsibilities were eventually reflected in

Revenue Regulations 13-98, adopted on Dec.lO, 1998. The PCNC was publicly

launched on February 5, 1999.

To be eligible for certification by the PCNC, NGOs must meet the following

minimum requirements:

VOLUME VI NUMBER 2 (July- December 2002) 11

Aldaba

• be registered/accredited with the appropriate government institution,

• have an operating organizational structure,

• have a track record of development programs for identified clientele,

• have operating and accounting systems in place and working,

• have audited financial statements for the past two years.

Newly established N GOs may also apply and may be given certification only

for a year. However, slightly different criteria for evaluation will be used. There is

also a PlO,OOO.OO application fee. The areas to be assessed by a team of three

selected evaluators include:

• Vision, mission, goals of the NGO

• Over-all Governance

• Administration

• Program Operations

• Financial Management

• Networking

The board of PCNC may approve or disapprove the recommendation of the

evaluators for the certification of the NGO concerned. According to the PCNC

target when they started operations, they hope to certify 300 NGOs at the end of

this year. As of the middle of 2002, 184 NGOs have been certified.

12

The following are criticisms and observations on the PCNC (PCNC undated):

• There is bias against small NGOs because of the very high application fees

and stringent requirements.

• There should be additional services which can be offered to NGOs like tax

exemption for the NGO itself.

• The PCNC itself is not financially sustainable as it is also dependent on

donor grants in its early years of operation.

• There can still be improvement in the evaluation tools as some indicators

are still largely subjective and contingent on the biases of the evaluators.

PUBLIC POLICY

Doing Good and Being Good: Aspects of Development NCO Governance in the Philippines

Effective and Efficient Implementation of Programs and Projects

The indicators of this aspect of governance can only be successfully measured

at the specific NGO level. Evaluation of this area will also entail an analysis of the

cost structures (e.g. cost per beneficiary, cost per trained person) of the NGO over

time or as compared to a similar NGO. These types of evaluation regarding the

optimal use of resources by the NGOs are rare in the Philippines. Most types of

evaluation are focused on whether the target clientele is reached, on the develop-

ment impact of the project on beneficiaries, or on whether the sectors targeted are

involved in project design and implementation. The data gathered in the survey

will only give us an indication of the size of planned budgets and expenditures of

development NGOs.

Expenditures and budgets

Planned budgets of respondent NGOs are higher than their actual expendi-

tures. The median budgets of the respondents were P 2.35 million in 1996, P 2.81

million in 1997 and P2.71 million in 1998 while actual median expenditures were

P 2.26 million, P 2.45 million and P2.28 million, respectively. This may mean that

development NGOs are relatively prudent in terms of spending as they avoid pos-

sible deficits. NGOs have very limited access to credit and the means for repay-

ment may not be attractive for mainstream financial institutions.

Note that the mean budgets and expenditures are significantly higher than

their median counterparts as shown above. This means that their budgets and ex-

penditures observations are biased towards the smaller ranges, particularly those

lower than three million pesos. The mean and median budgets and expenditures

increased from 1997 to 1998 but decreased from 1998 to 1999, probably the effect

of the East Asian crisis which peaked in 1998.

VOLUME VI NUMBER 2 (July- December 2002) 13

Aldaba

TABLE 6. Descriptive Statistics of Budgets and

Expenditures of Respondents, 1997- 1999

Budget 1997

Budget 1998

Budget 1999

Expense 1997

Expense 1998

Expense 1999

Mean

7,102,570.13

7 ,560, 104.94

7,812,634.85

7,164,646.51

7 ,615,172.68

7 ,389, 108.58

Median

2,356, 685.00

2,810,836.42

2,712,321.51

2,264,664.94

2,444,350.00

2,288,816.00

Mode

2,000,000.00

3,000,000.00

1,500,000.00

300,000.00

200,000.00

200,000.00

Note: In Philippine pesos. Budgets are the planned expenditures of NGO respondents and do not correspond to the income

that they have received.

Source. CODE-NGO-AF Survey, 2001

The total sum of budgets and expenditures ranged between P 2.7 billion and

P3.7 billion during this period. According to Tuano (2001), this would indicate

that development NGO activity in the country is significant and that the amount

is more than one and a half times the budget of the Department of Social Welfare

and Development (DSWD) for 1999. He adds that assuming the sum is at least

25 percent (a low estimate) of all development NGO activity, then the develop-

ment NGO community contributes at least 0.4 percent of total gross domestic

product (GDP) in the Philippines and equal to 2.2 percent of national govern-

ment expenditures.

Financial sustainability

One major indicator of good governance is the ability of an N GO to maintain

financial viability. NGOs need to do a lot of fund raising and income generation to

become sustainable. With donor funding becoming more limited and competitive,

the challenge of financial sustainability has become very real for NGOs. According

to the CODE-NGO-AF Survey, l~ss than half of the NGO respondents (47.8 per-

cent) are financially sustainable. Around a third of the number (30.3 percent) are

14 PUBLIC POLICY

Doing Good and Being Good: Aspects of Development NGO Governance in the Philippines

not sure of.financial stability, while a small but significant number (13.2 percent)

are not stable at all. The PHILSSA survey shows some 70% of their membership

being financially stable. The sample size here may be small and self-selection bias II

larger compared to the latter survey .

Tuano (2001) observes that the differences in median budgets and expendi-

tures of those that are financially stable, not financially stable and unsure of their

financial status are s}gnificant. The 1999 median budgets and expenditures of those

that are financially stable are P 4.02 million and P 3.20 million, respectively. Those

that are not stable and unsure are P1.63 million and P 1.60 million, and P 2.00

million and P 1.54 million respectively. He adds that more stable NGOs have

larger staff size ( 6-7) as compared to the unsustainable ones ( 0-1).

According to type of organization, the following NGOs are relatively more

sustainable: corporate foundations, 67.0 percent; memorial foundations, 64.3 per-

cent; and fund-raising mechanisms/ institutions, 52.8 percent. Those with the smallest

proportion that answered positively are consortia, 10.0

percent; Church-based NGOs, 33.6 percent; networks,

35.6 percent; and religious institutions, 33.6 percent. It

is obvious that the former group has stable sources of

income (i.e. corporate funds or endowment funds).

However, it is surprising that religious institutions are rela-

tively "unsustainable". A recent stud/2

on philanthropy

and individual giving showed that Filipinos give more to

A recent study showed that Filipinos give more to religious groups.

religious groups. Tolentino and Caccam (2001) note that Catholic Groups like El

Shaddai and Couples for Christ are able to raise Pl00-200 million per year and that

the Archdiocese of Manila gets almost half a billion a year.

sources of Grants and Financial Assistance

From the survey, development NGOs have varied sources of funding. How-

ever, one notes that total funding from foreign-donor grants is equivalent to 40% of

development NGOs' total funding in 1999. It must also be highlighted that fund

raising campaigns contribute a miniscule 0.1 %.

VOLUME VI NUMBER 2 Guly- December 2002) 15

Aldaba

The proportion of total income from internally generated sources (including

membership dues, earned income and fees, endowment and fundraising activities)

is just a quarter (25.7 percent) of revenues of respondents.

Effective Networking and Partnerships

The CODE-NGO-AF survey data show that roughly more than eight of ten

are affiliated with local networks while only a third of the respondents (37.4 per-

cent) are directly linked with international networks and institutions. Sixteen net-

works were involved in the aforementioned survey.

TABLE 7. Indicative Proportion of Sources of Funds, 1997- 1999

Sources of Funds 1997 1998 1999

Membership Fees 1.8% 1.7% 2.0%

Earned Fees 17.3"1< 16.2% 15.4%

Bilateral Grants 5.7% 10.1% 10.3%

Multilateral Grants 2.2% 2.0% 3.0%

Foreign Foundation Grants 21.1% 23.4% 24.5%

Local Private Grants 4.0% 3.0% 2.8%

Church Grants 2.6% 3.0% 3.2%

Government Grants 3.7% 3.4% 4.3%

Endowment 8.5% 7.7% 7.3%

Loans from Government 0.1% 0.2% 0.0%1

Loans from Conduits 0.1% 0.2% 1.1%

Loans from Private Sector 0.1% 0.0% 0.3%

Fundraising Programs 0.8% 0.9% 0.1%

Donations 19.9% 19.2% 16.1%

Other Income 11.8% 9.0% 8.7%

Note: The sources of funds are calculated from the reported expenditures (not actual income levels which were not asked in the

survey) and the reported percentage coming from each source of funds. Thus these percentages are highly indicative and do not

represent the actual proportions of resources coming from each fund source (Tuano, 2001 ).

Networks may be regional (as giv.en by some of the above) or issue-based (e.g.

Corporate Network for Disaster Response, Asia Caucus, etc.). Networking has

16 PUBLIC POLICY

Doing Good and Being Good: Aspects of Development NCO Governance in the Philippines

been one of the comparative advantages of Philippine development NGOs. Many

find networking important in terms of contact building (for possible partners), for

sharing information and resources for training, research and advocacy, bargaining

with donors or government, etc. Networking and partnerships enable NGOs to

utilize their resources more efficiently and effectively while being able to have a

bigger voice at the local, national and international levels.

Personnel and staff Development

Another aspect of good governance is how the NGO treats its staff members

in regard to wages and other benefits plus their training and human resource needs.

In addition, another important area is whether there are participatory processes in

decision-making. The available data are only for the former while we can only cite

anecdotal evidence for the latter.

Characteristics of NCO staff

A total of 13,677 paid and volunteer staff were employed in 1998 and 15,014

staff were employed in 1999 among NGO respondents that participated in the

survey. Tuano (2001) assumes that these figures comprised 25 percent of the entire

workforce in the development NGO sector and estimates that in 1998-1999, they

comprised 0.17-.19 percent of national employment and 1.02-1.07 percent of em-

ployment in the community and private services sector 13

. Most staff members of

the development NGOs surveyed were likely full-time rather than part-time and

paid rather than volunteer. Females also outnumbered males, 53 to 45%.

According to the PHILSSA Survey, the regularization of the staff members

increased from 60% in 1994 to 71% in 2000. Volunteer staff decreased from 29%

in 1994 to only 11% in 2000. Another interesting finding of the PHILSSA survey

is that female staff member proportion increased from 57% in 1994 to 68% in

2000. This verifies the trend in the wider survey. The PHILSSA survey also shows

that most staff members are relatively young, belonging to the 21-30 years bracket

(45%) and 31-40 years bracket (34%).

VOLUME VI NUMBER 2 Ouly- December 2002) 17

Aldaba

Table 8. Employment Status of Heads (Executive Directors) and

Aggregate Staff, In Percent to Total

Status

Full-Time

Part-Time

Paid

Volunteer

Males

Females

Heads

72.3

21.8

n. a.

n. a.

45.1

52.9

Aggregate

62.1

31.9

63.6

36.4

37.8

62.2

Source. CODE-NGO-AF Survey, 2001

It is also noticeable that NGO staff members are college degree holders. Among

executive directors, many have postgraduate degrees (7.6 percent have doctoral

degrees and 38.7 percent have Master's degrees) while more than a third have

college degrees (35.4 percent). Among all the staff in the sample of respondents,

14.8 percent have postgraduate degrees. Thus, NGO personnel have a higher level

of education than the average levels among the Philippine population. (Tuano 2001)

TABLE 9. Education Status of Heads and Staff, In Percent

Education Status

With Pos!graduate Degree

- of which: have Ph. D. degree/ education

have M. A. degree/ education

With College Degree

Source.· CODE-NGO-AF Survey, 2001

Salaries and Benefits

Heads

46.3

7.6

38.7

81.7

Aggregate

14.8

2.2

12.6

74.7

NGO workers receive pay below that of the private sector and probably on a

par with the government sector. "Psychic income" compensates for the mentioned

18 PUBLIC POLICY

Doing Good and Being Good: Aspects of Development NCO Governance in the Philippines

wage gap. The PHILSSA survey gives us an indication of how much NGO work-

ers actuallv receive in terms of salaries and benefits14

. The results show that major-

ity of Executive Directors across geographical locations receive monthly salaries of

P14,000.00 and below, with 50% of these getting P10,000.00 and below15

• The

CODE-NGO-AF Survey gives a range ofP 13,500.00 toP 21,000.00. For program

staff members ofPHILSSA, salary rates range from P6,000.00 to 12,000.00, where

the bulk is found between P 6,000.00 and P 10,000.00 There are also some staff

members who receive salary rates below the mandated minimum wage.

What is noticeable though is that the disparity in the wages of the director and

the low ranking staff is quite small. In terms of benefits, majority of those NGOs

surveyed give the legally mandated benefits such as vacation and sick leaves, 13th

month pay, SSS and PHILHEALTH contribution, etc. In terms of training and

staff development, these are often hindered by the NGO's lack of resources and

the staff's lack of time or too heavy workload. The PHILS SA members' situation

may be indicative of the typical NGO in the Philippines. However, in the CODE-

NGO-AF survey, the salary rates are higher in corporate and memorial foundations

because of their bigger resources.

current and Key covernance Issues in the Development NCO Community

The Need for Greater Transparency and Accountability

Given the data above, it is important to observe that Philippine development

NGOs have initiated moves to.improve their transparency and accountability. The

PCNC effort is laudable but it must encourage more NGOs and donors to use the

system. Foreign donors and even some local ones still rely on the recommenda-

tions of existing partners or network in trying to evaluate new NGO applicants for

funding. The proposed gross income taxation16

for corporations may also render

the tax incentives to the prospective donors useless.

There is some anecdotal evidence of N GO corruption occurring in the coun-

try. However, to date, there are few examples publicized in print media, with most

being "alleged" cases of NGO misdeeds 17

• There are of course a number of fly by

VOLUME VI NUMBER 2 Ouly- December 2002) 19

Aldaba

night NGOs reported by studies, cornering government funds for specific projects

(e.g. tree planting). Gibelman and Gelman (2001) enumerate certain types of

NGO misdeeds that became public scandals in various parts of the world- em-

bezzlement, forgery, fraud, theft, misuse of funds, skimming and disappearing do-

nations, sexual harassment, etc. The list looks familiar and the anecdotes on NGO 18

corruption in the Philippines involve similar cases . Gibelman and Gelman at-

tribute these events to "governance failure," which includes:

• failure of supervision and oversight,

• improper delegation of authority,

• lack of turnover of board members,

• failure to institute internal controls,

• absence of "check and balance mechanisms," and

• isolation of board members from staff, programs and clients.

In the Philippine case, many NGOs have non-working or inactive boards. Board

meetings are very infrequent. The executive director typically has wide authority

over many issues especially if he or she is also the founder of the organization.

Internal controls are sometimes not institutionalized as work and other activities

are typically based on "trust". In particular, financial management structures are

weak as will be discussed in more detail below. In order to avoid the occurrence of

scams and scandals, NGOs must have a structure where roles, responsibilities and

accountabilities are clear and where internal controls and checks and balances are

built-in. In addition, work incentives (i.e. salary rates) are oftentimes inappropriate

to the actual work being done.

Financial Management and sustainability

Another perennial problem of development N GOs is their dependence on donor

grants. Very few N GOs are able to generate their own funding for operations. Only

relatively big ones and those with endowments are able to become financially sus-

tainable. A host of other issues relate to this failure to generate own funds- the

ability to craft programs independently of donors, the ability to give reasonable

20 PUBLIC POLICY

Doing Good and Being Good: Aspects of Development NGO Governance in the Philippines

wage rates to staff members or even to sustain programs and projects in the com"

munities. However, a more basic issue is financial management. The very low incidence of

NGOs submitting financial reports to the SEC is alarming although businesses are

also notorious for not doing so. However, because development NGOs are by nature

public interest organizations, they need to be more transpar-

ent and accountable. In addition, because they have multi-

stakeholder constituencies, they need to establish various

mechanisms to inform and report to these various groups.

However, whether internal or external, informal or formal

mechanisms are established to "regulate" NGOs, the ben-

eficiaries of a more transparent and accountable NGO in-

clude the N GO itself and its stakeholders, especially the com-

... the NGO's credibility enables it to access more resources ...

munity. This is because the NGO's credibility enables it to access more resources

which in turn can be used for the benefit of its constituencies. Sustainability thus has

a prerequisite- good financial management and transparency.

While the survey data show that most development NGOs have existing fi-

nancial policies, the question of effective implementation remains. There are still

no comprehensive studies assessing the financial management capabilities of de-

velopment NGOs since this will require massive data gathering. One possibility is

to standardize financial reporting by development NGOs. This is currently being

initiated among cooperatives in the country. Many NGOs also fail to appreciate the

importance of being entrepreneurial in the sense of creating "profits" or surpluses

for the organization. Some donors do not appreciate the creativity of N GOs in

generating savings as they require NGOs to spend the entire programmed budget

by the end of the fiscal or calendar year.

community Empowerment

Another important issue is related to how development NGOs are able to nur-

ture community and people's organizations they have helped establish. Despite long

organizing experiences among NGOs, there are many failed attempts to make such

VOLUME VI NUMBER 2 (July- December 2002) 21

Aldaba

organizations autonomous and self-reliant. When NGOs leave their area of work,

these organizations also fade away. People's organizations criticize NGOs because

the sharing in terms of grant money for projects is usually tilted in favor of the NGO

since the latter plays the role of the conduit. 19

This is an important governance issue

as the N GO's effort to make people's organizations sustainable becomes suspect. At

the same time, its commitment to genuine community empowerment will always be

challenged if its partner organizations remain dependent on it.

This difficulty in effecting community empowerment can be gleaned from the

trend which shows that organizing is ranked only fourth in terms of primary activity

for development NGOs, next to networking, advocacy and training. Few develop-

ment NGO workers are able to sustain community organizing work. Most would

rather take up advocacy, research or the management of economic projects as they

grow older in the organization. NGOs need to partner with strong people's organi-

zations that have the comparative advantage in community organizing rather than

themselves being engaged in such activity.

staff Turnover

Another key problem that N GOs confront is the high turnover among staff and

their inability to sustain the commitment of the relatively more senior staff. These

people leave theN GO in search of jobs that will give them more appropriate rewards,

both financial and non-financial. Staff continuity is important for the sustained rel-

evance of the organization and for maintaining a certain quality of service to its target

clientele. NGOs typically associate this problem with the lack of resources. How-

ever, there are alternative ways of handling personnel turnover given resource con-

straints. For example, many NGOs are now resorting to part-time and flexible (i.e.

contractual or work at home arrangements) employment as they allow more senior

people to earn incomes in other endeavors or organizations. The drawback however,

is that the full time workforce becomes relatively young and inexperienced.

In terms of wage and benefits, the PHILSSA study mentions the concept of

"NGO rate" which is below the market wage. Turnover becomes inevitable as

NGO workers age. Having families to feed, NGO workers look for greener pas-

tures. This "NGO rate" must be adjusted to become more attuned to a simple but

22 PUBLIC POLICY

Doing Good and Being Good: Aspects of Development NGO Governance in the Philippines

comfortable middle class lifestyle. Without this salary adjustment, high turnover

rates will continue to plague the NGO community. Some workers themselves

comment that it is illogical for NGO workers to live below the poverty line and

become "totally immersed with the poor and marginalized sectors".

The Relevance of cood covernance Among Development NCOs

Why do development NGOs need to practice good governance? Basically

because of the following major reasons:

• Development NGOs are key and strategic organizations that promote good

governance in all sectors of society. Thus, they should be models themselves;

if not, they will lose their credibility as advocacy groups.

• Development NGOs are important for the preservation of democratic space

and democracy as a whole. As civil society actors, development NGOs

must be able to properly fulfill their roles and justify

the space available to them. Bad governance

attracts government intervention in their affairs.

• Development NGOs are venues for the practice

of "citizenship" among the people. A citizen needs

to have some sense of commitment to the nation

and society. Development NGOs are important

A citizen needs commitment to the nation and society.

mechanisms especially for the middle class to participate in the process of

building a democratic society.

• An increasing number of people depend on NGOS for their livelihood. As estimated in the survey, the sector contributes in terms of employment. Bad

governance may throw these people out of their jobs.

• A large number of citizens depend on them for services rendered like training,

credit programs, health and other social services.

Good governance advocacy is not only meant for government and the corpo-

rate sector. Because development NGOs have charitable and noble missions, good

governance must be a practice at all times. "Doing good must always be matched

by being good".

VOLUME VI NUMBER 2 (July- December 2002) 23

Aldaba

NOTES

1 Most of the data used in the study were culled from Tuano (200 1) who processed the data from the CODE-NGO-AF Survey. Another source was the PHILSSA Survey. The author wishes to thank Randy Tuano for all the tables used, Marissa Reyes, Dan Songco and Oman Jiao of CODE-N GO and AF and Jing Karaos of PHILSSA for allowing the author to use data from

their respective institutions. 2 As of June 2002, there are around 152,535 non-stock, non-profit organizations in the country. 3 The organizations classified as NGOs are so diverse that it is possible to have one NGO

belonging to two or more categories (e.g. a faith based group like the National Secretariat for

Social Action is also a development NGO). . 4 These are my observations based on my over twenty years experience working with development

NGOs. 5 PHILSSA did a similar survey in 1994. 6 In the survey, these are referred to as "core competencies" by NGOs (Tuano 2001) 7 It is possible to open only personal or joint accounts, not organizational accounts.

8 This is basically Metro-Manila. 9 Even CODE-NGO was subjected to criticism by sectors in the NGO community when it was

able to negotiate a deal concerning the sale of government bonds worth billions of pesos known as the Peace and Equity Bonds. CODE-NGO notes that this was an innovative way to raise funds for poverty alleviation projects but critics accused them of "rent-seeking," as the network was closely aligned with the Arroyo administration.

10 The government's tax collection agency. 11 Most probably, those that are able to respond to the survey are the ones that are relatively stable.

Those which are not simply ignored the survey. 12 Investing in Ourselves by the Ventures for Fund Raising. 13 The comparable figures are: a) Total employment: 31.3 million (1998), 32.0 million (1999); b)

Community, social and personal services sector employment: 5.6 million (1998), 5.9 million (1999).

14 The CODE-NGO-AF survey also has data on salaries and benefits but it did not publish such data in the public report.

15 The exchange rate is around 53 pesos to one US dollar. 16 A fixed rate will be charged to the firm depending on its profit level. 17 Newsbreak, a magazine, reported on the cases of the World Bank funded NIPAs and the

Philippine Children's Fund of America. The ERAP-Muslim Youth Foundation was also alleged to be the conduit for channeling gambling pay-offs to former President Estrada.

18 Examples include an N GO utilizing funds for purposes outside those approved by the donor, or an NGO engaged in "double funding" which means that the same project and amount are funded and reported to two different donors. There are also cases of embezzlement that have occurred at various levels- from executive director level to financial officers to ordinary staff members.

19 The NGO has the capability to write proposals and negotiate with donors.

24 PUBLIC POLICY

Doing Good and Being Good: Aspects of Development NCO Governance in the Philippines

Selected References:

Aldaba, F. 1993. The role of NGOs in social transformation. Philtppine politics and society. Quezon City: Ateneo Center for Social Policy and Public Affairs, pp. 2-

54.

----, Fowler, A. et al. 2000. NGO strategies beyond aid: Perspectives from Central and South America and the Philippines. Third World Quarterly 21 ( 4):

669-684 .

----. 2002. Philippine NGOs and multi-stakeholder partnerships: Three case studies. Voluntas 13(2): 179-192

Alegre, A. 1996. Trends and traditions, challenges and choices: A strategic study of

Philzppine NGOs. Quezon City: Ateneo Center for Social Policy and Public

Affairs.

Association of Foundations. 2001. Philzppine NGOs: A sourcebook of social

development NGOs. Quezon City.

Caucus of Development NGO Networks. 1991. Covenant on Philzppinedevelopment.

Quezon City.

Gibelman, M. and S. Gelman. 2001. Very public scandals: Non-government

organizations in trouble. Voluntas 12(1): 49-66

Philippine Center for NGO Certification (n.d.) NGO selfregulation: The Philzppine

experience. Makati City.

Quizon, A. and R. Reyes. 1989. Strategic assessment of NGOs in the Philzppines.

Manila: Asian NGO Coalition.

Saldana, C. 2000. Corporate governance: Environment policy and their impact on

performance and finance. Phzlzppine review of economics 37(2): 8-15.

Tolentino, A. and E. CaccamJr. 2001. Strengthening philanthropy in the Asia Pacific

region: An agenda for action-background paper: The Philzppines. Asia Pacific

Philanthropy Consortium.

Tuano, P 2001. Philippine social development NGOs-Analysis and trends. A

Sourcebook of social development NGOs. Quezon City: Association of

Foundations.

VOLUME VI NUMBER 2 Ouly- December 2002) 25

Aldaba

United Nations Development Programme. 1997. Reconceptualisinggovernance, New

York, (] anuary).

World Bank, Philippines. 2000. Growth with equity: The remaining agenda. Manila.

Data:

CODE-NGO &Association of Foundations, NGO Project Survey, 2001

PHILSSA NGO Salaries and Benefits Survey, 2001

26 PUBLIC POLICY

Giving and Volunteering among Filipinos1

RAMON L FERNAN Ill

Introduction

The Philippine Nonprofit Sector Project is an effort to map the nonprofit

and civil society sector in the Philippines and to understand the phenomenon of

altruism among Filipinos as expressed in their giving and volunteering behaviors.

This paper expounds on the results of the project's study of the giving and volun-

teering behavior of Filipinos and what this implies for the sector in terms of rais-

ing local resources.

The survey was conducted in six areas spread among the three major geo-

graphical divisions of the country over the period of several months in late 1999

and early 2000. The surveys occurred at a time of general economic slowdown.

The repercussions from the financial crisis of 1997 were still being felt, and drought

was negatively impacting agricultural production, agriculture being the dominant

source of livelihood for the majority outside the Metro Manila region. According

to a World Bank report, between 1997 and 1998, a million people were added to

the jobless ranks, and the unemployment rate rose from 10% to 13.3% (World

Bank 2002). In 1997, three out of every four households considered themselves

to be poor (Mangahas 1999, 3).

Fernan

Background

Almost by definition, nonprofit organizations generally depend on the generosity

of benefactors and on the support of volunteers in their operations. Nonprofit organi-

zations (NPOs) are non-governmental, privately organized groups that do not dis-

tribute profits to owners or stockholders the way business corporations do, even if

they earn income from their operations (such as hospitals and schools). Aside from

nonprofit schools and hospitals, this definition encompasses social clubs, sports clubs,

neighborhood associations, research organizations, associations and other member-

ship organizations, people's organizations and non-government organizations (NGOs).

These organizations make up what is variously called the nonprofit sector or the Third

Sector or the civil society sector, depending on one's particular reference point (for a

discussion of this "naming" issue, see Carino 2002, 1-25).

The largest nonprofit organization in the country, the Roman Catholic Church,

depends significantly on private donations, although it has real properties and

other income-earning assets to supplement private giving. However, some church

officials have recently floated the idea of requiring tithes from church members

because of a supposed fall-off in church giving in recent years. Protestant and

other non-Catholic churches and religious organizations, far smaller than the domi-

nant Roman church, probably depend to an even greater extent on members'

regular contributions for their operations. Foreign-based groups have also tradi-

tionally received significant subsidies from their mother churches.

In the eighties, the apparent inability of government to deliver certain basic

services, particularly at the community level, led to the establishment of small

nonprofits calling themselves development-oriented NGOs, and, later, civil so-

ciety organizations ( CSOs). Due to the difficult political conditions then exist-

ing, many of them also took on advocacy roles and were involved in commu-

nity organizing and in encouraging people's organizations as part of the growing

movement to empower people. They became the darlings of the international

philanthropic community, receiving liberal doses of foreign funds based partly

on their perceived role as a counterweight to the authoritarian and ineffective

Marcos regime.

28 PUBLIC POLICY

Giving and Volunteering Among Filipinos

Today, local nonprofit organizations are finding it more and more difficult to

raise funds from their traditional foreign benefactors. New priorities have drawn

funders' interests elsewhere, but increased competition from other nonprofits and

better government delivery of services (causing donors to concentrate on less "for-

tunate" countries) are among other reasons for this change.

For nonprofit and voluntary organizations, a growing concern has been how to

fill this gap that only promises to grow wider. The logical answer seems to be "from

local sources," but that is obviously dependent on whether such resources are avail-

able and if they are of sufficient quantity as to be able to support the sector. Here

we are speaking both of financial resources as well as human resources as they

pertain to the following questions: Do Filipinos give to charitable and other non-

profit causes? Do they volunteer for such causes? To what specific causes are these

resources now directed? What are the prospects for increasing these resources over

time and broadening the causes that they support?

The surveys

Data for household giving and volunteering were collected via household sur-

veys in six areas around the country in late 1999 and early 2000. The survey areas

were purposively chosen in order to complement the survey of nonprofit organiza-

tions that the Project was also conducting at that time. In each area, 60 clusters or

barangays (villages) were selected randomly proportionate to size (except for Metro

Manila which was split into two areas). Estimating a 75% response rate, interview-

ers in each area were asked to randomly approach around twenty households in

each cluster in order to successfully interview at least 15 of them. This method was

designed to ensure a sample size of at least 900 households per survey area. Two

questionnaires were actually applied per household. The giving questionnaire as-

sumed that giving was a household behavior and that normally, the decision would

be made by the household head, his or her spouse, or the household member who

earned the highest income. The volunteering questionnaire assumed that individu-

als made their own decisions on whether or not to volunteer so that a random

method for choosing the household member or members to be interviewed was

VOLUME VI NUMBER 2 Ouly. December 2002) 29

Fern an

implemented. The table below shows the number and distribution of respondents.

The questionnaires were drafted based partly on the results of preliminary focused

group discussions conducted, five in Metro Manila among mixed income groups

and three in a rural setting outside the city. The data cited below reflect estimates

calculated from survey results. Estimates were calculated using provincial survey

data to represent average values per household per provincial income classification

(using household data from the 2000 census and the 2000 classification of prov-

inces by income put out by the Department of the Interior and Local Govern-

ment). The limitation of this procedure is that it explicitly assumes that provincial

survey data are typical of each particular income category, something that may or

may not be true.

Area

Metro Manila

Benguet

Iloilo

Southern Leyte

Davao del Sur

Table 1. Matrix of Respondents by Area, Type of Questionnaire,

and Urban/Rural Distribution

Giving Questionnaire Volunteering Questionnaire

Urban

1,410

550

370

204

568

Rural

359

773

902

Urban

1,359

661

580

258

Rural

375

1,146

1 '115

Zamboanga del Norte 114

325

772

822

184

512

1,231

TOTAL 3,216 3,131 3,864 4,379

Despite the economic slump, a high proportion of households claimed to have

given in the past year. More than eight out of every ten ( 86%) households said they

gave to organizations in the twelve months immediately prior to the survey (1998-

99), while two out of three (74%)'also gave directly to persons in need. This inci-

30 PUBLIC POLICY

Giving and Volunteering Among Filipinos

dence is much higher than household giving in the United States where 75 percent

is the norm (Hodgkinson and Weitzman 1996, 13).

This giving was directed primarily at churches with a 73 percent level of sup-

port (chart 1) and a 44 percent share in the total amount donated to organizations

(chart 3). Churches traditionally depend on individual giving for a large portion of

their revenues. The obligation to support the church, the Catholic Church in par-

ticular, is deeply embedded in the psyche of the Filipino masses even if this is

manifested mainly in Sunday giving at mass, much of

which probably comes out of spare change. For good

measure, the church has a plethora of services covering

its faithfuls' needs over their entire life cycle, services

that are "paid" for by "voluntary donations."

The incidence of giving to other sectors pales in com-

parison to church giving. Less than a third (29 percent)

of households also gave to social services organizations,

while one out of four (24 percent) gave to culture and

The obligation to support the church is deeply embedded in the psyche of the Filipino masses

recreation groups. One of every five households (20 percent) gave to education and

research, mostly local schools, as well as to the myriad neighborhood groups that

tend to crop up on occasion to address purely local concerns such as a religious

feast, a sports competition, leisure and recreation activities or peace and order prob-

lems. Rounding out these groups of recipients are those concerned with health ( 13

percent) and with development and housing issues ( 10 percent). These mostly com-

munity-based groups form a second level of recipients of giving, in contrast to a

third group of nonprofits that have mandates that go beyond the confines of neigh-

borhood or local community. This third group, consisting of environmental advo-

cates, philanthropy promoters, professional associations and unions, and the like,

benefited from the giving of less than 10 percent of households. From this pattern,

it seems that people are still mostly worried about local concerns that affect them

directly, and prefer to show their charity to organizations that address these issues.

Organizations that go beyond primarily local issues and towards more abstract and

policy-type issues tend to attract less individual giving.

VOLUME VI NUMBER 2 (July- December 2002) 31

Fern an

Chart 1. Incidence of Giving by ICNPO*

NEG ]::::::==:=:::~ 20

Associations & Unions

International ~==================~73

Law & Advocacy

Environment

1~~~1~3~~~~----------~ Social Svcs 29 20 Culture & Recreation 4 0 20 40 60 80

Percent

NOTES: ICNPO stands for the International Classification of Nonprofit Organizations

developed by the Comparative Nonprofit Project of Johns Hopkins University. This

classification scheme identifies the groups of organizations that comprise the nonprofit sector.

They consist of:

32

NEC - not elsewhere classified

Local n'hood groups -local neighborhood groups

Associations & Unions- professional associations and workers' unions

Churches- churches and religion promoting organizations

International- international organizations

Philanthropy- philanthropy promoting organizations

Law & advocacy -legal rights, advocacy and political parties

Development- development and housing organizations

Environment- groups that work in environment and animal protection

Health -include hospitals, nursing homes and other health services organizations, among

others

Social svcs- groups engaged in the delivery of social services

Education- organizations engaged in education and research

Culture & recreation- groups promoting culture and the arts, recreational clubs and

service clubs

PUBLIC POLICY

Giving and Volunteering Among Filipinos

One popular perception about giving is that people give because they can af-

ford to. What does "being able to afford to" mean? Surely, poor households are less

able to afford to give. Yet household socio-economic classification information in-

dicates that more than 80% of lower income households (i.e., low income house-

holds with monthly incomes of fifteen thousand pesos or less) gave to charity in the

past year, matching the rate among higher income households. Income becomes a

constraint in the amount one is able to give but not, it seems, in the desire to do so.

The Amount of Civing

Total giving in the past year prior to the survey (1999-2000) amounted to an

estimated P32.184 billion (US$631 million), with 42 percent of this amount going

to organizations while 58 percent was given directly to persons in need (table 2 and

chart 2). Thus, while relatively more people said they gave to organizations, the

amount given was less than that provided directly to persons in need.

lfable 2. Household Giving to Organizations and Persons, amount in Pesos and USD

Pesos

US$

Giving to orgns Ave. per HH Giving to persons Ave. per HH Total Giving

13,634,448,095 893 18,549,761,961 1,214 32,184,210,056

267,342,120 18 363,720,823 24 631,062,942

Chart 2. Distribution of Giving Amounts by

Beneficiary Type

Persons 58%

Organizations 42%

VOLUME VI NUMBER 2 (July - December 2002)

Ave. per HH

2,107

41

33

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This amount of total giving represented 1.2 percent of the value of gross do-

mestic product in 1998 and was about 18 percent of total government expenditures

on social services for the same year. In comparison, giving in the United States was

2.1 percent of GNP in 2000, and between 0.63 and 0.77 percent of GDP in the

United Kingdom. The relatively lower giving in the UK is attributed to the fact that

the state is expected to take care of its needy citizens whereas this is less true in the

U.S. (Wright 2001, 401). No state welfare system exists in the Philippines and

families are often expected to take care of less fortunate relations, however distant

they may be. This familial welfare system also often encompasses "friends."

Average giving per household was just a tad over P2,100 (US$41). Out of

this, P1 ,214 (US$24) on average went directly to persons in need while an average

of P893 (US$18) was given to organizations. Household charity amounted to 1.8

percent of average family income in 1997. Family income sustains many more than

just the core family members or even the already extended families that are com-

mon in many households.

Of the total amount given to organizations, 44 percent or almost P6 billion

went to churches and other places of worship with the bulk going to the Catholic

Church to which 80% of Filipinos belong. Social services groups received 13 per-

cent or about P1.8 billion of donations. It seems that even the small yet regular

contributions of members total to significant amounts for churches, a point that

should not be lost on other nonprofits. However, only those organizations that

have broad appeal and that are able to mobilize massive numbers in support of

their cause or causes can hope to replicate these kinds of numbers. It is no wonder

then that even newly established religious charismatic movements, often attracting

members from the lower soCio-economic classes, have had relatively good success

in soliciting donations. Only social service organizations seem to be in a position to

currently capture a significant amount of charitable giving from the general public.

Many other nonprofit organizations, particularly those in advocacy work, currently

depend on foreign grants.

Despite this rather highly skewed donation profile, the Catholic Church has

recently complained about a fall off in giving and has aired the possibility of impos-

ing tithes on its members. This is probably less an indication of diminution in the

34 PUBLIC POLICY

Giving and Volunteering Among Filipinos

total amount of giving to the sector than the result of more competition, particu-

larly from religious charismatic movements that have become popular within the

last decade or so. The fact that these movements thrive mainly with support from

lower income households is quite revealing.

On the other hand, there is reason to be optimistic about the nonprofit sector.

A potentially substantial base of support exists, especially should economic and

political reforms result in greater income equity. Non profits must learn how to es-

tablish their niche in this market and endeavor to tap the resources that are avail-

able even now.

Chart 3. Distribution of Amount of Giving by ICNPO

(Percent)

NEC

Associations & Unions

International

Law & Advocacy

Environment

6

F=====================~44

0 10 20 30 40 Percent

Volunteering

50

Three of every four Filipinos 13 years old and over volunteered in the past year

(1998-99, based on 1999 population estimates). This is significantly higher than

the incidence of volunteering in other countries, notably in developed countries

such as the US (56%), Canada (31%) and the UK (48%).

Before initiating this survey, the project staff conducted focus group discus-

sions in order to discover what activities Filipinos considered to be "volunteering."

VOLUME VI NUMBER 2 Ouly- December 2002) 35

Fern an

Among the fairly common activities identified as volunteering were two that stood

out- "praying for someone" and "lending money without interest." Both are curi-

ous concepts that do not appear in conventional (i.e., Western) descriptions of vol-

unteering. It may help to think of these two activities as partly stemming from how

Filipinos popularly regard volunteering, that is, an act that involves actually helping

out someone in need rather than being merely the generic manifestation of an inner

compulsion to be charitable. In the case of praying for someone, this assistance

takes on a purely religious form, not surprising in a country that stubbornly clings to

the legacy of four hundred years of Spanish Catholicism.

This act of praying is a purposive act as it involves taking the time to invoke

divine intervention for someone who needs assistance. Its popularity may also be

attributed to the fact that it involves relatively little cost- the few minutes it takes

to say the prayer. This had the highest incidence among all the activities identified

as volunteering with a 41 percent share (see chart 4).

Chart 4. Incidence of Volunteering by Activity Type

:::::::::J 4 I Counseling 33

:::::::::J 4 Workshops 5

==::J 3 Mancom 5

16 Sports 12

26 Public health 6

.·

==::J 3 Peace & order 10

37 Foster parenting 12

41 Lend money 33

33 Emergency 130

Percent

Lending money is also an act of assisting someone in need, with 33 percent of

respondents saying they engaged in this activity. Apparently, people consider this to

be a form of charity even though the money lent out is eventually returned. In an

36 PUBLIC POLICY

Giving and Volunteering Among Filipinos

environment where poverty is still widespread or where cash flow is a problem,

having to borrow money is quite common. Ordinarily, lending money, particularly

without any collateral, is a money-making activity, more associated with loansharking

rather than with altruistic behavior. Therefore, in contrast to the exploitative nature

of loan sharking, the logic of lending money without interest is helping someone in

need without extracting a payment or penalty while involving some cost to the

lender, thus a form of charity.

The other volunteering activities that had significant incidence levels were com-

munity cleaning (37 percent), helping someone in non-emergency situations and

counseling ( all3 3 percent), and assisting in emergency situations (30 percent). About

a fourth of volunteers helped in organizing community religious activities (26 per-

cent).

The weighted mean for hours volunteered per week is 6.7 hours. This is signifi-

cantly higher than that recorded for northern countries. These hours are heavily

weighted by the type of activities that Filipinos say they volunteer for, particularly

those types that are done informally, that is, done for persons rather than organiza-

tions. In particular, volunteering by "praying for someone" pushed the hours up

significantly. Volunteering activities were also classified into formal (for organiza-

tions) and informal (for persons) volunteering. Chart 5 shows that volunteering for

individual persons made up about two-thirds of all volunteering activities. Formal

volunteering averaged just under five hours per week while informal volunteering 2

averaged 8.2 hours per week.

Chart 5. Incidence of Volunteering, by Type

Informal volunteering

66%

Formal volunteering

34%

VOLUME VI NUMBER 2 (July - December 2002) 37

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Beneficiaries of Volunteering

As with giving, volunteering among Filipinos tend to show their charity first

and foremost towards persons they know, either members of the family or friends.

Such assistance is, in fact, considered a social and personal obligation. The third

most popular group of beneficiaries consists of victims of calamities. The personal

nature of volunteering (as well as giving) can also be inferred from the type of

activities volunteers say they do, with those activities principally benefiting persons

directly being the most popular (the informal types).

Defining Civing and Volunteering Close to Home

This personal nature of charity among Filipinos can also be gleaned from the

way they define the acts of giving and volunteering. This came out first in the fo-

cused group discussions conducted prior to the surveys as respondents named ac-

tivities not traditionally associated with the usual concept of volunteering. The two

that stood out were: praying for someone and lending money without interest. Pray-

... what is the cost (or the

pain) involved in praying for

someone ...

ing for someone can be regarded as the easiest way that a

Filipino can express his or her altruism while at the same

time keeping it couched in the religious terms that are com-

monly associated with good works among people steeped

in Christianity. It is difficult to put this activity in secular

terms for the object of that prayer is often to ask for divine

intervention regarding that person's welfare. The question

is, ':"hat is the cost (or the pain) involved in praying for

someone if it is true that altruism indeed involves some cost to the do-gooder?

Another form of charitable act that seems popular among Filipinos is the giving

of advice, or counseling. In contrast to the usual western concept where counseling

is a professional activity, giving counsel to persons is something that is freely asked

and freely given among Filipinos. It is someone's experience that counts in evaluat-

ing who can be a good counselor, rather than the presence of a university degree.

While offering or sharing something tangible is central to the idea of giving, an

emotional "hook" is also associated with the concept. People are expected to show

38 PUBLIC POLICY

Giving and Volunteering Among Filipinos

concern or sympathize with someone's less fortunate plight. Feeling compassion

for someone is often enough especially when the sympathizer has nothing of mate-

rial value to share. Respondents in the focus groups said that the intention to help is

just as important and, in fact, "completes the act of giving."

It seems that praying for someone (in the broadest sense rather than just the

Christian one), lending money without interest and counseling or giving advice are

traditional ways of helping others that have been carried forward into the present

and persist despite the intrusion of similar western concepts, albeit imbued with

the aura of professional services (with their corresponding professional fees). Un-

derstandably, these types of assistance are generally directed towards people known

to the provider. Unlike within the professional context and even other forms of

giving and volunteering wherein assistance is given in the most generic and anony-

mous of terms, these traditional forms of assistance developed within the close

knit communities of pre-Hispanic settlements where everyone was related to each

other in one way or another.

The Role of Culture and Tradition

It is clear that people perceive giving and volunteering in the broadest possible sense, and that represents a problem in trying to measure one form of altruistic

behavior against another. It also makes it difficult to make cross-cultural compari-

sons when people's perceptions differ so markedly or are so culture-bound. Handy,

et al. (2000, 46) address the measurement aspect of this problem by proposing a

net-cost approach, but the problem goes beyond this one dimension. Culture and

tradition also clearly play a part in how people define altruistic behavior.

In a country where over half of the population consider themselves to be poo/ ,

altruism is alive. Much of this altruism is directed towards assisting people known

to the giver. The giving of alms also continues to be a popular way for expressing

altruism despite laws prohibiting mendicancy. Even giving to institutions is often

facilitated by personal ties between donor and solicitor.

Only in religious giving is this personal mediation superfluous. A religious up-

bringing of four hundred years with a heavy dose of Catholic guilt conditions this

VOLUME VI NUMBER 2 0uly- December 2002) 39

Fern an

behavior. There is also no denying that churches have continued to be major pro-

viders of community services and, therefore, to be a major presence in communi-

ties, particularly in the poor and rural areas. Otherwise, people's charity appears to

be primarily directed